Kraft's Cadbury bid set to be approved by EU

BRUSSELS - U.S. food group Kraft Foods Inc (KFT.N) is set to clear a hurdle in its hostile 10 billion pound takeover bid for Cadbury (CBRY.L) by winning EU approval this week, a source familiar with the situation said on Monday.

The European Commission, the European Union's executive, is reviewing Kraft's takeover plan after the maker of Dairylea and Oreo cookies offered concessions last month to ease regulatory concerns that its bid for Cadbury could be anticompetitive.

A decision is due by Wednesday. The European Union competition watchdog is expected to clear Kraft's bid conditionally, the source said.

It will be a phase one clearance based on commitments offered by Kraft, the source told Reuters, but gave no details.

Under EU merger regulations, the Commission usually carries out a first-phase, 25 working days review of a takeover or acquisition. It can launch an in-depth investigation if it feels there are competition concerns with the deal.

Kraft said last month it had offered concessions in a few markets and did not expect the regulator to demand major divestments.

Kraft shares were up 0.9 percent to $27.41 and Cadbury shares were 1.1 percent higher at 806 pence by 1536 GMT.

Kraft is expected to sweeten its bid in the next two weeks in a final attempt to win over Cadbury.

For a graphic on Cadbury's share price and the value of the Kraft bid, click: